Demand for physical gold and silver surged last year as smart investors sought safe haven from a record-breaking expansion in the money supply, record federal budget deficits, and quantitative easing set to infinity.
Sales of US gold and silver bullion coins at the US Mint hit a 4-year high in 2020.
The Mint sold 884,000 ounces of American Gold Eagle coins last year.
It was a 455% increase over the 152,000 ounces sold in 2019. It was the highest level of gold coin sales since 2016.
American Silver Eagle sales increased by 101% with 30.01 million ounces sold in 2020.
Coin sales surged despite supply chain issues due to government lockdowns around the globe. The US Mint had to temporarily shut down production at its New York facility in April due to COVID 19. Due to production cuts, there were no half, quarter, or tenth-ounce Gold Eagle coins available several months last year.
With demand high and supply short, premiums on gold and silver coins skyrocketed. When spot silver hit its low of around $12 an ounce in March, premiums shot up as high as $12 a coin.
The busiest month of the year was March. The US Mint sold 151,500 ounces of Gold Eagles and 5,482,500 ounces of Silver Eagle coins in that month alone. In fact, the Mint completely sold out of American Silver Eagle coins in March.
The second-biggest month for gold coin demand was in August when the price of the yellow metal broke its all-time high and briefly pushed above $2,000 an ounce. The US Mint sold 121,000 ounces of Gold Eagles that month.
Demand for physical gold should remain brisk in 2021. There is no end in sight to the borrowing, spending and money printing. Peter Schiff has been predicting inflation pressures will ramp up significantly in the coming year. In fact, we’re already seeing the impacts of a weakening dollar. For instance, import costs have doubled and in some cases tripled. Commodity and agricultural prices are up.
We are really going to reap the whirlwind of the inflation winds that we have been sowing for years, but particularly ever since COVID,” Peter said of 2021.
And the Federal Reserve has made it clear it’s not particularly worried about inflation. In fact, it has moved its policy goalposts to let inflation run hot.
Inflation is bad news for consumers, but it’s good for gold and silver.